Gilead Sciences is betting nearly $12 billion on Kite Pharma’s CAR-T technology, and one of the factors that influenced it is Kite’s readiness to handle the complex and time-sensitive manufacturing and logistics demanded by the personalized cell-therapy treatments.
Gilead this week announced its $11.9 billion for Kite, which is awaiting an FDA decision on its lead CAR-T medication, Axi-Cel, a cell therapy and potential cure for refractory aggressive non-Hodgkin lymphoma. During a webcast to discuss the deal, Gilead CEO John Milligan acknowledged that manufacturing for CAR-T treatments is complex and expensive, but he said Kite's system is scalable and that the companies' goal is to make it more efficient over time.
"There is quite an emphasis at Kite on innovation, not just to R&D but in the manufacturing area," Milligan said. "So they are committed to simplifying the system so future manufacturing is more cost-effective and scalable."
Gilead's deal was announced just days before Novartis won the first-ever approval for a CAR-T treatment, and then tagged it with a $475,000 price, a cost that thrusts it into the top tier.
Kite has not yet discussed pricing but Milligan explained that manufacturing costs are a factor that requires lofty price tags for the re-engineered cell treatments.
“I do want to remind people that these are very expensive products to manufacture,” he told analysts. “They have some of the most expensive manufacturing costs per patient that you will see in the industry.”
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That is because of the extensive process to genetically code a patient’s T cells to hunt and kill cancer cells, along with the need for speed. Instead of a mass-produced pill or injectable, the personalized treatment involves blood being taken from a patient at a hospital or center, cryopreserved, shipped to a facility where it is reprogrammed and manufactured in the lab. It is then shipped back for infusion into the patient, all in the shortest time possible to try to outrun aggressive cancers.
Because of the complexity involved in making this happen, investors have been anxious about how players will handle the expense of manufacturing and logistics.
Milligan, whose company is strictly in small molecules, said that after a “deep dive” into Kite’s manufacturing plans, Gilead became comfortable that it had “a robust delivery mechanism” that is scalable in a cost-effective way.
The process requires fine-tuned logistics to link patients to centers for harvesting T-cells and linking the centers to Kites manufacturing facility near Los Angeles, Kevin Young, Gilead’s chief operating officer pointed out. Kite has 10 centers ready to launch and is working to add others. It has achieved a 17-day turnaround from what the company calls “vein to vein.”
As they learned about that system, Milligan said Gilead folks became “enamored” with Kite’s system and its ability to support the patient flows that are expected in the future.
“I am not going to kid you that it is not complicated, because it is, but it is very easy to handle because of sophisticated computer systems and with the training of people,” he said.
The Novartis manufacturing approach will be similar, and with the approval of Kymriah this week, the Swiss drugmaker has sprung into action. Executives said 20 treatment centers will support the launch initially, with the number growing to 32 by the end of the year. Some of those will begin harvesting patients' T cells within days.
Novartis will manufacture its treatment at a plant in Morris Plains, New Jersey, that it bought in 2012 from the former Dendreon, which used a similar process of altering cells for its prostate cancer vaccine Provenge. The drugmaker also has an agreement with the Fraunhofer Institute for Cell Therapy and Immunology for the cell processing in Europe.
Novartis has said it expects to have the turnaround time for its treatment down to 22 days at the time of commercial launch, with 10 to 12 of those days being “the actual cell processing time.”
While the manufacturing is complex and expensive, Milligan told analysts that Kite and Gilead are committed to continually simplifying the system. "It is our goal to help drive down those costs over time to make it a more cost-effective therapy and to improve margins as well.”